Monday, February 23, 2004

A prominent Houston lawmaker's campaign fund-raising sweep at Reliant Energy has become part of a growing Travis County grand jury probe into possible criminal misuse of corporate funds to finance a Republican takeover of the Texas House.

Wooley’s fund raising at Reliant Energy probed

Donations tied to legislation wish list

By R.G. RATCLIFFE, Houston ChronicleFeb. 23, 2004

AUSTIN -- A prominent Houston lawmaker's campaign fund-raising sweep at Reliant Energy has become part of a growing Travis County grand jury probe into possible criminal misuse of corporate funds to finance a Republican takeover of the Texas House.

Rep. Beverly Woolley, R-Houston, swept through Houston corporate offices on Sept. 9, 2002, raising money for targeted House races as well as for Texans for a Republican Majority, according to an itinerary of her travel obtained by the Houston Chronicle.

Notes on her itinerary indicate she spoke to some donors about what types of legislation they would like.

"We're looking into the whole deal, the raising of the money, the spending of the money, to determine whether or not TRMPAC's use of corporate money was legal," Cox said.

A Travis County grand jury is investigating whether TRM violated a state ban on using corporate money to influence the outcome of more than 20 state House races in the 2002 elections. Among the money Woolley raised that day was $25,000 in corporate contributions from Reliant Energy for TRM.

Woolley did not return calls from the Houston Chronicle for comment.

Notations on Woolley's itinerary indicate that one energy executive said property taxes are "outrageous" and another energy executive wanted to take the "volatility out" of "severance tax policy." A banker who agreed to make $22,000 in donations directly to TRM-sponsored candidates wanted "to clean up home equity lending."

For financier Charles Hurwitz, it was noted he had an interest in improving the Texas horse racing industry, which he helped sponsor. The note said he had "retained (lobbyist) Elton Bomer -- Talked to (lobbyist Michael) Toomey."

At the time, Bomer was a horse racing lobbyist and Toomey was a lobbyist for Texans for Lawsuit Reform. TLR was one of five organizations targeting Republican House races.

TRM was part of a concerted effort with the Texas Association of Business and several other groups to take Republican control of the Texas House in the 2002 races and elect Tom Craddick as speaker. U.S. House Majority Leader Tom DeLay, R-Sugar Land, founded TRM.

After Craddick won the speakership, he named Woolley as chairwoman of the Calendars Committee, the panel that decides what bills are debated on the House floor.

Craig McDonald, executive director of Texans for Public Justice, an advocacy organization that filed a criminal complaint against TRM, said the move raises serious questions about whether Woolley traded legislative favors for donations.

"What kind of expectations did the donors have?" McDonald asked. "And what kinds of expectations did Beverly Woolley have? She ended up as one of the most powerful committee chairs in the House."

The DA's office also has subpoenaed records from Craddick and Republican state Reps. Dianne Delisi of Temple, Kent Grusendorf of Arlington, Phil King of Weatherford, Mike Krusee of Round Rock and Arlene Wohlgemuth of Burleson.

Corporations can legally contribute money for administrative operations of political committees, but none of the money is supposed to be used for political fund raising for candidates or direct activities that benefit candidates.

TRM in 2002 raised $1.5 million, including $574,550 in corporate donations. The committee gave $633,500 directly to candidates.

The grand jury investigation is focused on whether any of the corporate money was used for fund raising for the candidates, polling, direct mail or any other indirect activities.

There also are questions about $190,000 in corporate money that TRM donated to the Republican National Committee State/Federal Campaign account two weeks before the RNC donated a like amount of money to state House candidates on the TRM target list.

TRM director Jim Ellis previously has told the Chronicle that the operations were legal, third-party political activities that did not coordinate with campaigns. Ellis noted that all the donations were disclosed in either state or federal reports.

"There certainly was not intent by TRMPAC to hide anything," Ellis said. "Every attempt was made to comply with a confusing (state) law."

Ellis noted that raising money from corporations, as Woolley did, was legal. He said spending corporate money was legal. He said the only question is whether TRM officials defined administrative expenses appropriately.

The fund-raising itinerary obtained by the Chronicle indicates that in a single day, Woolley solicited a total of $61,000 from the corporate leaders, speaking directly with some about types of legislation they would like to see passed.

The documents obtained by the Chronicle list a travel schedule for Woolley and TRM-paid fund-raiser Susan Lilly to meet with six potential corporate donors.

A hand-written note on the itinerary called the trip a "36Kday + 25 Reliant." That meant $36,000 raised directly for candidates plus $25,000 in corporate money from Reliant.

The donation to TRM was made by then-Reliant Senior Vice President Bruce Gibson. Gibson now is chief of staff for Lt. Gov. David Dewhurst.

Gibson said he remembers meeting with Woolley but nothing that was discussed. Gibson said it was not unusual at the time for political organizations to seek corporate "soft money" to finance state and federal campaign funds.

"There were all kinds of soft-money accounts. I got hit hard," Gibson said. "They usually were not involved in races. They were for other expenses."

According to the itinerary, Woolley spent the rest of the day raising money directly for specific House candidates from Houston executives on behalf of TRM.